Canada: Court Of Appeal Summaries (October 26, 2015 – October 30, 2015)

Last Updated: November 10 2015
Article by John Polyzogopoulos

The Court of Appeal released a number of civil decisions this week. Topics include a class action lawsuit involving alleged bribery, non-disclosure and other serious corruption allegations, whether an accepted offer to settle included the payment of costs, a Rule 21 motion argued in the middle of a wills and estates trial, MVA/SABs, dismissal for delay, a messy and lengthy custody and access case, and the enforceability of a settlement agreement arrived at between separated spouses, where one spouse was incompetent and acting through a litigation guardian.

Enjoy your weekend and watch out for little ones while you are driving tomorrow evening. Happy Halloween!

Civil Cases

Chrisjohn v Riley, 2015 ONCA 713

[Gillese, van Rensburg and Miller JJ.A.]


D. M. Bryce, for the appellants

L. N. Bloom and A. Fazel, for the respondent

Keywords: Torts, Negligence, Motor Vehicle Accident, Dismissal for Delay, Lawyers' Negligence, Remedies, Prejudice, Burden of Proof

Facts: The appellants appealed an order refusing to set aside an administrative dismissal of their personal injury action. One appellant was seriously injured in a motor vehicle accident in 2002. In 2004, an action was commenced by the appellants' first lawyer seeking damages for the appellant accident victim's injuries, and damages under the Family Law Act for the other appellants, who are the injured appellant's family members As a result of the delay, negligence, and deliberate actions of the appellants' first and second lawyers, no motion to set aside the dismissal was brought until more than five years after the dismissal. After the dismissal, the respondent (who had never been formally added as a defendant to the action) was told that the appellants would no longer pursue the personal injury action and would instead be suing their first lawyer. The respondent did not hear anything from the appellants for almost three years, until it received a notice of a motion to set aside the dismissal. At the hearing, the motion judge dismissed the motion on the basis that the motion was not brought promptly as there was a delay of five and a half years from when the appellants became aware of the dismissal. This delay gave rise to a presumption of prejudice that was not rebutted by the appellants. Furthermore, the motion judge found there was a "compelling consideration" of finality as the respondent has assumed for almost three years that the case was over.


(1) Did the motion judge err in his consideration of the explanation for the litigation delay by ignoring, or failing to give proper weight to, the uncontroverted evidence that the appellants always intended to proceed with the personal injury action?

(2) Did the motion judge refuse to consider as relevant the prospect that, if the action were not restored, the appellants may be without any real remedy for the serious personal injuries sustained by an appellant after a head-on collision with an impaired driver?

(3) Did the motion judge err in his assessment of prejudice?

Holding: Appeal dismissed with costs to the respondent in the amount of $12,500.


(1) No, the motion judge was well aware that it was the conduct and inaction of the appellants' counsel, and not of the appellants themselves, that led to the administrative dismissal and the failure to move to set aside the dismissal promptly. The motion judge considered the evidence in the appellant's two affidavits that made it clear that she relied on her lawyer's assurances that the action would continue after the administrative dismissal occurred. The appellant also stated that it was always her intention to pursue her claim for compensation. The Ontario Court of Appeal in Finlay v Van Paassen found that on a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, and not with the conduct of their counsel. However, the court also recognized that the situation may change if the lawyer's conduct is deliberate and not inadvertent. Although the appellant always intending to pursue her claim weighs in favour of setting aside the administrative dismissal, it is not sufficient. The rights of all the parties must be considered to determine ultimately whether it would be fair and just to set aside the dismissal and to allow the action to proceed.

(2) No, the motion judge did not err in refusing to consider the appellants' chances in their solicitors' negligence actions. He did not fail to appreciate the very serious consequences to the appellants if the personal injury action were not restored. Instead, his decision turned on the question of prejudice – whether the respondent, after such a significant delay and after being informed that the action was at an end, would fairly be able to defend the appellants' claims if the action were restored. The lack of a guaranteed alternative recovery against the appellant's former counsel cannot be determinative. The motion judge specifically stated that he did not take into account whether the plaintiffs had another remedy against either solicitor for negligence. This followed the Finlay v Van Paassen decision where the Court of Appeal cautioned against weighing the plaintiff's ability to sue her former counsel as a factor.

(3) No, the motion judge did not err in his assessment of prejudice. According to the Court of Appeal in MDM Plastics Ltd. v Vincor International Inc., the relevant prejudice is the defendant's ability to defend the action that would arise from steps taken following dismissal or which would result from the restoration of the action. The onus is not on the respondent to demonstrate "significant and actual" prejudice, but on the appellants to rebut the inference of prejudice relating to the respondent's ability to defend the action. The motion judge correctly concluded that the onus was not met in this case, and that actual prejudice relevant to the ability to defend the action on damages and liability had been established. The motion judge relied on the extensive evidence put forward by the respondent of actual prejudice to its ability to defend the action. Although the appellant's counsel went to considerable lengths to attempt to address the question of prejudice, the motion judge noted that there were important gaps in the available medical evidence as a result of the passage of time. Consequently, the respondent's ability to assess and evaluate the appellants' claim for damages was impaired. In addition, liability would be a live issue in this case, and significant evidence regarding liability was also no longer available.

Holgate v. Sheehan Estate, 2015 ONCA 717

[Cronk, Hourigan and Benotto JJ.A.]


Ronald Petersen, for the appellants
Paul A. Dancause, for the respondents

Keywords: Wills and Estates, Interpretation, Trusts, Resulting Trust, Constructive Trust, Determination of an Issue Before Trial, Rules of Civil Procedure, Rule 21, Appeal Dismissed

Facts: John Holgate and May Sheehan married, each having children from previous marriages. Mr. Holgate's will and codicil provided the new Mrs. Holgate (formerly Sheehan) a life interest in two trusts, which she used after his death for her expenses and for accumulating savings. Upon her passing, she left the bulk of her estate to her biological children rather than Mr. Holgate's. Mr. Holgate's sons alleged that Mrs. Holgate violated the trusts by accumulating wealth. They sought against Mrs. Holgate's estate and her daughter an accounting, freezing of funds and general damages of $5 million, as well as a declaration that they were entitled to an interest in both estates. Mid-trial, both counsel agreed, at the request of the presiding judge, to bring a Rule 21 motion to determine whether the trust provisions precluded Mrs. Holgate from accumulating wealth. The court held that she was not prevented from doing so.

Mr. Holgate's sons appealed on two grounds: that the trial judge erred in his interpretation of the trusts and that he had no jurisdiction to hear a Rule 21 motion during the trial. They also sought leave to appeal the trial judge's award of costs. Finally, they submitted that costs should have been paid by the estate and, in the alternative, that the costs award was excessive.


(1) Did the trial/motions judge err in his interpretation of the trusts?

(2) Did the trial judge have jurisdiction to hear the Rule 21 motion during the trial?

(3) Should costs have been paid by the estate?


The answer to all three questions was "no." The appeal was dismissed.


(1) The Court agreed that the first trust allowed for the depletion of the capital of the estate. Moreover, the will had no limitations on the use of income, on the recapitalization of unused income, or any requirement on behalf of Mrs. Holgate to first replenish her own resources before using trust income. The second trust also placed no limitations on the use of trust assets. Ultimately, both trusts contained an intention that there be no limitation on the discretion of the trustees to draw on income or (with respect to the first trust) to encroach on capital and that there be no prohibition on accumulating funds.

The language of the first trust "indicated a clear intention on Mr. Holgate's part to allow his wife unrestricted access to the funds," while the second trust contained "no words of limitation regarding access to and use of income; the trustees [were] empowered to draw on the income of the estate for the use and benefit of Mrs. Holgate."

(2) The Court reasoned that the appellants consented to the Rule 21 process without objection to timing and participated in the drafting of the question to be answered. They did not receive the decision they had hoped for, but could not now claim that there was a lack of jurisdiction.

The Court also rejected the appellant's submission that the trial judge improperly relied on assertions made by the respondents when interpreting the will. The trial judge made it clear that he attributed the information relied on to the parties, but grounded his decision on the wording of the will and codicil and not on the evidence at trial.

(3) The Court granted leave to appeal costs but dismissed the appeal as to costs. The motion judge's authority was discretionary and the Court saw no reason to interfere with the quantum of costs ordered. The trial judge's ruling was "neither plainly wrong nor tainted by an error in principle."

Gilbert v South, 2015 ONCA 712

[ Laskin, Lauwers and Hourigan JJ.A.]

T.J. McCarthy, for the appellant

R.J.T. Shaheen, for the respondent

Keywords: Insurance Law, Automobile Insurance, Statutory Accident Benefits, Future Care Costs, Jury Trial, Motion for Mistrial, Improper Statement, Instructions to Jury, No Miscarriage of Justice, Expert Evidence, Assignment of Accident Benefits, Collateral Benefits, Courts of Justice Act, ss. 134(6), Insurance Act, ss. 267.8(9)


The Respondent, Steven Gilbert, worked as a letter carrier for Canada Post. He was injured in a car accident in April, 2010 by an uninsured driver, Michael South. Despite South being at fault, the Respondent's insurer, York Fire, the Appellant in this case, was liable to pay any damages awarded to the Respondent as a result of the uninsured motorist provisions of the Respondent's policy. The Appellant did not dispute liability.

At trial in March, 2014, the issue in dispute was causation. The Respondent maintained that the accident was wholly responsible for his injuries, while the Appellant disputed that the injuries complained of were largely attributed to a low back condition, pre-dating the accident, and workplace injuries sustained after the accident. The Appellant also argued that a post-accident injury in November, 2011 ("the grey box incident") caused the Respondent to request a transfer to a sedentary position with Canada Post.

The Respondent was successful at trial, and was awarded total damages of nearly $500,000 by a jury for future care, attendant care and past and future income loss. The Appellant brought a motion for a mistrial to the trial judge, Leach J., as a result of counsel for the Respondent's closing address to the jury, stating the address was improper. Justice Leach dismissed the motion but gave correcting instructions to the jury. The Appellant appealed Justice Leach's order, and made additional submissions on appeal.


(1) Whether the trial judge erred in failing to grant a mistrial on motion by the Appellant.

(2) Alternatively, whether the trial judge erred because his correcting instructions to the jury effectively endorsed rather than condemned counsel's improper comments.

(3) Whether the trial judge erred by permitting one of the Respondent's witnesses, Dr. Kumbhare, to give an opinion on a matter not contained in his report.

(4) Whether the trial judge erred by failing to impose a trust or order an assignment of the Respondent's accident benefits for future care costs.

Holding: Appeal dismissed. The Appellant failed to establish any of the four grounds of appeal.


(1) No, the Appellant failed to persuade the court that the trial judge exercised his discretion unreasonably in refusing to declare a mistrial. While there was cause for concern about the improper comments on closing of the Respondent's counsel, a mistrial is a remedy of last resort. Such a decision attracts considerable deference from the Court of Appeal and it was found that Justice Leach's refusal to grant a mistrial was entirely reasonable.

The court found that the improper comments were not so serious or prejudicial that they could not be addressed by appropriate correcting instructions to the jury. To intervene, allow the appeal and order a new trial, the court would have had to be satisfied that the trial judge's refusal caused a substantial wrong or miscarriage of justice, per subsection 134(6) of the Courts of Justice Act. In the present case, the trial judge's refusal did not cause any miscarriage of justice and appellate intervention in his exercise of his discretion would be entirely unjustified.

(2) No, the trial judge's correcting instruction to the jury was fair and no condemnation of counsel's comment was necessary. Per the Court of Appeal in Landolfi v Fargione, a trial judge should give correcting instructions right after the closing jury addresses or early in the charge to the jury.

Correcting instructions should have four components, namely, they should: be clear and unambiguous; point out the offending comments to the jury; explain the impropriety of the comments; and instruct the jury to disregard the comments and to base its findings and decision solely on the evidence. The court found the trial judge in this case met those requirements.

(3) No. As the witness' testimony relating to "the grey box incident" was relevant to the central issue at trial, despite not being addressed in his report, the trial judge exercised his discretion reasonably in allowing the witness to give an expert opinion on the incident. The trial judge recognized that since the Appellant's own expert gave an opinion on the incident in his report, it would be unfair to preclude the Respondent's expert from also giving an opinion on the incident.

(4) No. Pursuant to a motion by the Appellant under subsection 267.8(9) of the Insurance Act, the trial judge dismissed the Appellant's request for an order requiring the Respondent to hold the additional accident benefits in trust for the Appellant or to assign his rights to the Appellant to prevent double recovery.

In making his decision the trial judge correctly set out the principles governing the imposition of a trust or an order for an assignment under the provisions of section 267.8, as per Sutherland v Singh. Further, the trial judge had correctly determined that those requirements could not be met.

Based on the Appellant's submissions, the trial judge was unable to accurately determine what, if any, portion of the future care costs award mirrored expenses that the Respondent was entitled to claim under his accident benefits policy. Thus, the trial judge was unable to determine with certainty whether the Respondent would be over-compensated by the receipt of collateral benefits.

Canaccord Genuity Corp. v. Pilot, 2015 ONCA 716

[Weiler, van Rensburg and Roberts JJ.A.]


T. Harris, for the appellants

C. Tedesco and M. Byers, for the respondent

Keywords: Employment Law, Duty of Honest Performance, Duty of Good Faith, Bhasin v Hrynew, Misrepresentation, Loan, Default, Motion for Summary Judgment


Canaccord terminated the contracts of four employees when it closed its Thunder Bay office in 2012. Each of these employees had received a loan from Canaccord which became due and payable upon termination. When Canaccord noticed that payment was not forthcoming they commenced an action for repayment. The employees defended the action saying Canaccord made a misrepresentation by not telling the employees they were closing the plant.

One employee submitted that because of this misrepresentation, he was not required to pay the loan. The other employees claimed their agreement to repay the loan is null and void. All of the defendants counterclaimed for damages. Canaccord brought a motion for summary judgment for repayment of the loans against two of the four employees, Colosimo and Pilot. The motion judge awarded judgment of $187,900.16 in favour of Canaccord.


(1) Did the motion judge err in granting summary judgment?

(2) Did the motion judge err in her analysis of the requirement that Canaccord failed to act in an honest and fair manner towards the employees?

Holding: Appeal Allowed.


The court agreed with one of the employees, Colosimo, that the motion judge made an error of fact in finding that the terms for repayment of Colosimo's loan were different from those of the other defendant's loans. The motion judge's error caused her to adopt too narrow an approach. With regards to misrepresentation by omission, the court held there was some evidence of a course of conduct by Canaccord that could give rise to the inference that the employer did not act in complete good faith in its contractual obligations towards the employees. The court relied on the decision in Bhasin v. Hrynew, and held that there is a general duty to act honestly in the performance of contractual obligations. Even though Canaccord made the argument that Colosimo had not specifically pleaded that it breached its duty of good faith towards him, Canaccord's termination of the contracts and its requirement that the employees enter into new contracts in July 2011 raises a good faith issue that impacts the common issues relating to all the defendants.

The court ruled that the findings of fact necessary to reach a fair and just determination on the merits could not be made in this case without taking into consideration the evidence of the other defendants who were in the same relationship to Canaccord as Colosimo. The possibility of inconsistent verdicts with respect to the same agreement and two of the same defences is real. The court allowed the appeal and set aside the summary judgment against the appellants Colosimo and Pilot.

Ramidal v. Davis, 2015 ONCA 726


Uma Kancharla, for the appellant
Erin Melnyck, for the respondent

Keywords: Family Law, Substitute Decisions Act 1992, Litigation Guardian, Settlement Agreement, Setting Aside, Miglin v Miglin, Summary Judgment, Family Law Rules, Rule 16


The appellant and the respondent were married in 1995. They separated in early 2012. The parties jointly owned the matrimonial home. Since the time of the separation, the appellant lived in the matrimonial home. The respondent continued to pay the monthly mortgage payments, property taxes and house insurance premiums on the matrimonial property. Since April 2012, the respondent has been living in a full-care nursing home; the costs which have exceeded his annual income.

In 2010 the respondent had triple by-pass surgery and fell very ill. After he was discharged from the hospital in 2012, the appellant had complete control over the respondent's pension income, personal savings and other assets that he had acquired before marriage. In 2012, the respondent was declared incapable of managing property pursuant to s.6 of the Substitute Decisions Act, 1992.

The appellant then commenced matrimonial proceedings. In those proceedings she sought spousal support and other financial relief. In 2013, the court ordered that the respondent's son, Mr. Davis, be his litigation guardian and his continuing power of attorney and also requested parties to make certain financial disclosure.

Prior to being designated as his father's attorney, Mr. Davis had concerns about whether the appellant had mismanaged his father's finances. After an investigation, the son's concerns were well founded. At mediation the son alleged that the appellant had misappropriated significant sums of money from the parties' joint bank account during the asset control period. The appellant denied these allegations.

They eventually came to a settlement, but soon after the appellant refused to honour the terms of the settlement. Mr. Davis moved for a summary judgment pursuant to rules 16(1) and 16(6) of the Family Law Rules to enforce the terms. The appellant brought a cross-motion to have the Settlement Agreement set aside.

The Motion judge ordered in favour of Mr. Davis and dismissed the appellant's motion. He found there was insufficient evidence of duress, unconscionability, and/or an improvident bargain to warrant setting aside the Settlement Agreement.

Issues: The appellant raises two issues on appeal.

1) Did the motions judge err by failing to order a trial of the issues raised on the motions; and

2) Did the motions judge fail to consider whether the substance of the Settlement Agreement complied with the objectives of the Divorce Act?

Holding: Appeal Dismissed


1) The court ruled that the appellant's first submission misunderstood the operation of rule 16(6) of the Family Law Rules. As the party bringing the motion for summary judgment, the respondent had the burden of showing no genuine issue requiring a trial. The court held that the appellant rested solely on mere allegations or denials, and failed to set out in her affidavit actual evidence – specifically, facts showing that there is a genuine issue requiring trial. The court agreed with the motions judge – he made no error granting summary judgment.

2) The court relied on the decision in Miglin v. Miglin offers guidance for the conduct of negotiations for separation agreements, including negotiations for the division of matrimonial assets. Where parties execute a negotiated agreement in the family law context and that agreement is called into question, the court should engage in a two-stage inquiry. The court ruled that the second stage was not relevant in this case, so only applied the first. The first stage of the inquiry consists of two steps:

i) The court should look to the circumstances in which the agreement was negotiated and executed to determine whether the applicant has established a reason to discount he agreement.

ii) The court considers the substance of the agreement.

The court agreed with the motions judge that the appellant was not vulnerable or under duress during the mediation and settlement. Based on the facts that both parties prepared mediations briefs, both parties were represented by legal counsel prior to the mediation process, both parties were involved in the mediation and both parties met separately with their respective lawyers to review and execute the Settlement Agreement, the court found there was no duress. The court held that the appellant failed to show any legitimate basis to set aside the Settlement Agreement.

Puri Consulting LImited v Kim Orr Barristers PC, 2015 ONCA 727

[Gillese, van Rensburg and Miller JJ.A.]


A. Sternberg, for the appellant

W. J Kim, for the respondent

Keywords: Contracts, Civil Procedure, Offers to Settle, Rules of Civil Procedure, Rule 49, Ambiguity, Whether Costs Payable Under Offer

Facts: The issue in this appeal was the interpretation of an accepted offer to settle. The parties were engaged in litigation over an account for services rendered. In 2012, an expert opinion was provided by the appellant in a class proceeding. The account remained outstanding after demands for payment, so the appellant brought an action for damages in March 2013. In December 2013, the appellant served a written offer to settle under Rule 49 which stated:

The plaintiff, Puri Consulting Limited, offers to settle this proceeding on the following terms:

  1. payment by the defendant to the plaintiff in the amount of $50,000, plus HST, in full and complete satisfaction of the plaintiff's claim; and
  2. this offer will remain open for acceptance until one minute after the beginning of the trial of this action.

At the pre-trial conference in May 2014, the parties disagreed as to the meaning of the Offer. The appellant's counsel made it clear that acceptance of the Offer would require the respondent to pay costs, but the respondent interpreted the Offer as inclusive of costs. Shortly before the trial was set to commence in September 2014, the respondent accepted the Offer and subsequently paid $50,000 plus HST. The appellant asserted that she was entitled to costs in addition to the amount paid by the respondent, and moved under R. 49.09 to enforce the settlement. The issue at the motion was whether the Offer provided for the disposition of costs. If the Offer did not, then R. 49.07(5)(b) was engaged which states:

Where an accepted offer to settle does not provide for the disposition of costs, the plaintiff is entitled... (b) Where the offer was made by the plaintiff, to the plaintiff's costs assessed to the date that the notice of acceptance was served.

The motion judge held that the meaning of the words "in full and complete satisfaction" in the Offer were unambiguous, and that those words provided for the disposition of costs. She also refused to consider evidence from the pre-trial discussions as R. 50.09 contains a prohibition against disclosing statements made in a pre-trial conference, and there was no suggestion that acceptance of the settlement was based on non-disclosure, duress, fraud or illegality. The motion judge also noted that had she considered this evidence, it would not have resolved any ambiguity.


(1) Did the motion judge err in interpreting the accepted offer to settle by focusing solely on the words "in full and complete satisfaction", and ignoring other aspects of the Offer?

(2) Did the motion judge err in interpreting Rule 50.09 by refusing to consider statements of the appellant's intention made at the pre-trial conference within the factual matrix?

Holding: Appeal allowed. Rule 49.07(5)(b) applies, and the appellant is entitled to costs to the date that the respondent's acceptance of the Offer was served. The respondent was ordered to pay $6,000, all-inclusive for costs of the Rule 49.09 motion, and the costs of the appeal in the amount of $7,500, inclusive of disbursements and HST.


(1) Yes, the motion judge made a reversible error by taking a literal approach to the Offer and acceptance, by focusing only on the words "in full and complete satisfaction" and ignoring other words in the Offer. As the Court of Appeal found in Dumbrell v. The Regional Group of Companies Inc., even where words in a written agreement are believed to be unambiguous, the meaning of those words can only be properly ascertained by considering the context in which the agreement was made. In this case, the motion judge should have considered the other words in the Offer, such as the word "claim". The motion judge treated "claim" as synonymous with "action", and she did not consider or resolve the issue of what "claim" in particular the Offer was meant to settle. A statement of claim contains "a claim for relief" in which various claims are set out including a claim for costs. In this case, the appellant claimed damages, interest and costs as separate items. As the offer to settle referred to the settlement of the appellant's "claim", there is ambiguity as to which "claim" the appellant meant to settle.

The motion judge also failed to consider the factual matrix of the Offer and its acceptance. She should have considered the Rule 49 context, including the purpose of that rule, the timing of the Offer and its acceptance in the litigation, and that the parties were lawyers and represented by counsel, so that they knew and appreciated the context in which they concluded their agreement. According to the Court of Appeal in Rooney (Litigation Guardian of) v. Graham, the purpose of Rule 49 is to encourage parties to make reasonable efforts to settle and to facilitate the early settlement of litigation. Rule 49.07(5) contemplates that offers to settle will be made that do not provide for the disposition of costs. This Rule gives an incentive for the defendant to accept an offer to settle promptly as the later that an offer that does not provide for costs is accepted, the more costs that will have to be paid. According to the respondent's interpretation of the Offer, which was accepted by the motion judge, the value of the Offer would decline over time as the parties approached their trial date and the appellant's legal costs increased. The timing of the making of the Offer and its acceptance also do not favour the respondent's interpretation of the Offer. The Offer was made relative early in the proceeding, after examinations for discovery were conducted, and was outstanding at the pre-trial conference when the parties knew that a trial date was scheduled in nine months. The respondent would have known that the appellant would have incurred additional legal costs to prepare for the trial as it approached yet it took no steps in the action. Furthermore, as a law firm, the respondent would have understood the implications of an offer to settle under Rule 49, and the default provision under Rule 49.07(4) that provides for costs.

(2) It was not necessary to consider the scope of the prohibition in Rule 50.09 and its possible application to this case, or to determine whether what was said at the pre-trial conference is part of the factual matrix to be considered when interpreting the settlement agreement. The evidence of what happened at the pre-trial conference was equivocal at best. The motion judge was correct in finding that had the evidence from the pre-trial conference been considered, it would have only indicated that the parties did not agree on whether costs were included in the Offer and would not have clarified the meaning of the agreement.

Drywall Acoustic Lathing and Insulation, Local 675 v SNC-Lavalin Group Inc., 2015 ONCA 718

[Hoy A.C.J.O., Weiler and Huscroft JJ.A.]


A. D. Lascaris, D. Worndl and A. O'Brien, for the appellants

S. Tenai and C. Sinha, for the respondents, SNC-Lavalin Group Inc,. Ian A. Bourne, David Goldman, Patricia A. Hammick, Pierre H. Lessard, Edythe A. Marcoux, Lorna R. Marsden, Claude Mongeau, Gwyn Morgan, Michael D. Parker, Hugh D. Segal and Lawrence N. Stevenson

C. Lax, Q.C., for the respondent, Gilles Laramée

R. Wise, for the respondent, Michael Novak

S. Kugler and M. Muñoz, for the respondent, Pierre Duhaime

L. Young, for the respondent, Stéphane Roy

Keywords: Corporate Law, Class Actions, Anti-Bribery Laws, Ontario Securities Act, RSO 1990, Part XXIII.1, s. 138.8(1), s. 138.14(1), s. 138.3, Statutory Claims, Limitation Period, Misrepresentation, Secondary Market Disclosure Documents, Rules of Civil Procedure, Rule 26.01, Amendment of Statement of Claim


This is a complicated matter. The appellants started a class action suit after revelations of possible bribery by SNC-Lavalin Group Inc. ("SNC"). The appellants alleged statutory claims for misrepresentation in secondary market disclosure documents under Part XXIII.1 of the Ontario Securities Act (the "OSA") against SNC, and its officers and directors.

The class consists of all persons who acquired SNC securities between November 6, 2009, and February 27, 2012. The respondents did not oppose the appellants' motions for leave and certification. Section 138.3(1) of Part XXIII.1 of the OSA allows a right of action for damages for a misrepresentation in the document. Leave is required under s. 138.8(1). Section 138.14(1) imposes a three-year limitation period for commencing the action..The appellants obtained leave to bring the misrepresentation claim.

The original allegations for misrepresentation included: (1) allegedly improper agreements between SNC and various agents, pursuant to which SNC made US$56 million in payments, and (2) criminal activity by two former SNC employees relating to SNC's activities in Bangladesh (the "Padma Bridge Project") that resulted in criminal charges being filed.

More incidents of alleged wrongdoing later came to light as the criminal and regulatory investigations continued. The appellants sought leave under Rule 26.01 of the Rules of Civil Procedure to amend the statement of claim to add these other incidents. The respondents opposed most of the amendments, arguing that new allegations required fresh leave under s. 138.8(1) of the OSA and that it was statute-barred. The motion judge granted leave to the appellants to amend their claim with respect to "corrective disclosures", but the other proposed amendments were dismissed.

The appellants brought a second motion to amend their statement of claim. The amendments included other allegations relating to bribery, embezzlement, etc. The motion judge granted leave to amend the pleadings regarding bribery in Bangladesh and misconduct connected to Canadian projects. However, the balance of the amendments advanced discrete misrepresentation claims and would require a fresh leave application under s. 138.8(1) of the OSA, which in any event was time-barred. The appellants appeal that order.


(1) Did the motion judge err by deciding that the appellants could not make the amendments without bringing a new leave application under s. 138.8(1) of the OSA?

(2) Did the motion judge err by concluding that s.138.14(1) of the OSA barred the disallowed amendments because they are out of time?

Holding: The appeal is allowed only so the appellants can plead that SNC committed a misrepresentation in failing to disclose the US$56 million agent payments and the criminal activity connected to the Padma Bridge Project. Otherwise, the appeal is dismissed.

The parties agreed to costs of $2,000 to the successful party on the motion and costs of $10,000 to the successful party on the appeal, inclusive of disbursements and HST.


(1) Yes. The motion judged erred by not allowing the appellants to plead that SNC committed a misrepresentation by omission in failing to disclose the US$56 million in agent payments connected to the criminal activity with the Padma Bridge Project. Because he did not permit this amendment, the motion judge did not consider whether it was properly pleaded.

However, the motion judge did not err in principle on his approach. The court does agree that when a plaintiff seeks leave to amend a statement of claim under Rule 26.01 after obtaining leave under s. 138.8(1), and after expiry of the limitation period in s. 138.14(1), the motion judge is to consider the precise misrepresentation that was pleaded when leave was obtained. This area should not be expanded because it could affect settlements.

The court does not believe that the motion judge's conclusion was inconsistent with the objectives of the leave requirement. The OSA is remedial legislation and its purposes are stated in s. 1.1 and Part XXIII.1 and is to provide protection to investors, to foster fair and efficient capital markets, facilitate access to justice for investors, and deter corporate misconduct.

(2) No. The motion judge did not err by deciding that the misrepresentation claims are statute barred because leave was not obtained. The motion judge concluded that it was too late for the appellants to obtain leave under s. 138.8(1) to plead the denied amendments. The portion of the omission allegation that can be pleaded is not statute-barred because it forms part of the misrepresentations initially pleaded.

Hodgson v. Johnston, 2015 ONCA 731

[Feldman, Lauwers and Benotto JJ.A.]


Sarah Young, for the appellants

Farrah Hudani, for the respondent, Emary Johnston

Jonathan Kline, for the respondent, Jason Mamounis

Keywords: Family Law, Custody, Stay Pending Appeal, Best Interests of the Child, Fresh Evidence

Facts: The grandparents of an 8-year-old brought an application for an order granting them custody. They moved for interim custody to prevent the mother's intended move to British Columbia with the child. The motions judge dismissed the motion and awarded custody to the mother, allowing her to move with her child on consent of the father. The grandparents were granted access to the child at various times during the year. The grandparents appealed that decision and at the same time brought a motion for a stay of the custody order pending appeal, which was granted.

Issues: Did the motion judge err in granting the stay?

Holding: Yes. Appeal allowed.

Reasoning: The motion judge had before her a misleading record. It should have consisted of the evidence before the motion judge below, unless the fresh evidence met the test in R. v. Palmer. A judge hearing a motion for a stay of an order must consider three factors: (1) whether there is a serious issue to be tried on the appeal; (2) the risk of irreparable harm if the stay is or is not granted; and (3) whether the balance of convenience favours a stay.

In a custody case, these factors are informed by a consideration of whether a change in custody was ordered in the court below. A stay should arise from the need to preserve the status quo or on proper fresh evidence under the Palmer test, which was not the case here.

It was inappropriate on a stay motion to reverse the factual findings of the motion judge in the decision under appeal, particularly on the basis of additional evidence filed on the motion for a stay that did not meet the Palmer test. Accordingly, the test for a stay was not met and the order granting a stay of the custody order was set aside.

Sarnia (City) v River City Vineyard Christian Fellowship of Sarnia, 2015 ONCA 732

[Doherty, Epstein and Tulloch JJ.A.]


M. Klippenstein and K. Elson, for the appellant

J. J. Hoffer and L. M. McKeen, for the respondent

R. Khawjs and C. Pike, for the intervener, Ontario Human Rights commission

Keywords: Municipal Law, Churches, Zoning By-Law, Costs, Partial Indemnity, Full Indemnity, Canadian Charter of Rights and Freedoms, Public Interest Litigant


River City Vineyard Christian Fellowship of Sarnia ("Rivery City") was successful on appeal against the City of Sarnia ("Sarnia") and now seeks costs on a full indemnity basis of $163,479.54.

River City is a church in Sarnia ("Sarnia") that operated as a men's homeless shelter in its church basement since 2006. Sarnia opposed the shelter because it breached Sarnia's zoning by-law. River City disagreed and continued to operate the shelter.

Sarnia applied for an injunction to stop the shelter. River City brought a counter-application to declare it was not contravening the by-law and that the by-law unjustifiably infringed its freedom of religion under the Canadian Charter of Rights and Freedoms. The injunction was issued and River City was prohibited from operating the shelter. The Charter claim was dismissed.

On appeal, the court held that the applications judge erred in his interpretation of the by-law. The shelter did not contravene the by-law because it falls within the meaning of "church-sponsored community activities and projects." It was not necessary to address the Charter claim.

Regarding costs, the Superior Court judge determined that both parties would be responsible for their own costs because the church has a theological mandate to do good work. This was a novel legal issue and it was not frivolous for the church to rely on American case law. Sarnia has greater resources and would not be substantially disadvantaged if it did not receive costs.

River City submitted that costs should be awarded on a full indemnity basis because it is a public interest litigant with limited financial resources. Sarnia submitted it is also a public interest litigant and has to enforce the by-laws.


(1) Is River City entitled to costs on a full indemnity basis?

(2) Is Sarnia required to pay the usual partial indemnity?

Holding: Costs should be awarded to River City on a partial indemnity basis fixed at $90,000, inclusive of HST and disbursements.


(1) No. River City is not entitled to full indemnity costs.

The basic rule is that costs should be awarded on a partial indemnity scale (Bell Canada v. Olympia & York Developments Ltd. (1994), 17 O.R. (3d) 135 (C.A.). The general principle when an appeal is allowed is that the costs below and of the appeal are awarded to the successful appellant: St. Jean (Litigation Guardian of) v. Cheung, 2009 ONCA 9, 45 E.T.R. (3d) 171.

This case does not involve matters of public interest that are truly exceptional, so the test for a public interest litigant does not apply. The court acknowledged that it was a novel issue that River City's religious freedoms would be infringed if the shelter was shut down. But, this issue does not have a significant and widespread societal impact.

(2) Yes. Sarnia is required to pay the normal scale of costs (partial indemnity).

Sarnia submitted that it should be exempt from the ordinary costs rule based on the factors set out in St. James' Preservation Society v. Toronto (City) (2006), 272 D.L.R. (4th) 149 (Ont. S.C.) However, Sarnia is not a public interest litigant. The actions Sarnia took were central to its functions as a municipality. Just because Sarnia serves the public, that does not mean that any litigation involving it is public interest litigation. Additionally, neither party acted vexatiously, and Sarnia's financial resources are significantly greater than River City's. While Sarnia did not have a pecuniary interest in the litigation, this alone was not enough to excuse it from having to pay costs.

Fiorito v Wiggins, 2015 ONCA 729

[Feldman, Juriansz and Brown JJ.A.]


D. Wowk and M. DeGroot, for the appellant

B. Ludmer, for the respondent

Keywords: Family Law, Civil Procedure, Custody and Access, Best Interests of the Child, Conduct of Parents, Contempt Order, Fresh Evidence, Parens Patriae Jurisdiction, Child and Family Services Act, s. 37(2)(f), Children's Law Reform Act, s. 24(2)


In this family law dispute, the Appellant, Anna Maria Fiorito (the mother) appealed three orders of Justice Harper, including a costs order. The Appellant and the Respondent, Jefferson Ross Wiggins (the father), have three daughters aged 14, 13 and 12. Upon the parents' separation, the three daughters lived with their mother with access by the father on Tuesdays and alternating weekends pursuant to a consent interim order from October, 2008.

A dispute arose over whether the mother was compliant with the consent order and the father brought a contempt motion, which motion was settled pursuant to minutes of settlement in 2010. Under the settlement terms, the mother was to maintain custody, with the father having 40 per cent of the residual time. However, performance under the settlement became an issue almost immediately, and a trial of custody and access issues was directed, with the father renewing his contempt motion.

A 22-day hearing on custody and access was held by the trial judge in 2011, where he made an order finding the mother in contempt and sentenced her to six months' probation. The probation terms required the mother to comply with all of the terms of the custody and access order and, in the event of a breach, for the matter to be brought before Justice Harper for submissions and sentencing (the "2011 Order"). The trial also ordered the Children's Aid Society to perform supervision and arrange for counselling, as well as a review before him in six months.

The six-month review commenced in July 2012, and became a 23-day trial-like hearing spanning 10 months. The trial judge granted custody of all three children to the father, with access to the mother via weekly therapy sessions with the children's therapist, Dr. Ricciardi (the "2013 Order"). The mother appealed on numerous grounds relating to alleged factual and legal errors made by the trial judge.


The court broke down the numerous allegations into four grounds of appeal:

(1) The finding of contempt in the 2011 Order;

(2) The trial judge's reliance on the Child and Family Services Act (the "CFSA") in the 2011 Order;

(3) The trial judge's analysis of the best interests of the child; and

(4) The absence of a timeframe in which to conduct an access review.

Holding: The court dismissed the Respondent's motion to quash, extended the time to appeal the 2011 Order, allowed the appeal of the 2011 Order, in part, and set aside paragraphs 1 and 2 of the 2011 Order. The court also allowed the appeal of the 2013 Order and set aside paragraph 3 of that order.

The court then allowed the parties' motions to file fresh evidence and directed a review of access arrangements before the Superior Court of Justice. Finally, pending the review hearing, the court varied paragraph 2 of the 2013 Order to increase the mother's access.


(1) The court considered whether a contempt order is a final order or a mid-trial ruling and held that it is a final order per the decision in Mantella v Mantella. However, because the 2013 Order was informed by many of the factual findings made in the 2011 proceeding, and because the findings were based on the mother's failure to comply with the 2011 Order, the court granted an extension of time in which to appeal the 2011 Order, to be dealt with on the merits.

The court noted that the civil contempt remedy is one of last resort and should not be granted in family law cases where other adequate remedies are available to the aggrieved party (per Hefkey v Hefkey). The court also found that by the time of the 2011 hearing, the 2008 and 2010 Orders were interim orders superseded by the parties' 2010 custody settlement. Consequently, there was no order outstanding with respect to which the mother could be found in contempt, and the trial judge's finding and imposition of a sentence was set aside.

(2) The court noted that there was no need for the trial judge to rely on the CFSA or his parens patriae jurisdiction as a Superior Court judge in order to make a finding that the children had suffered emotional harm from their mother's actions. The trial judge erred in doing so, as it was open to him to take that finding into account under section 24(2) of the Children's Law Reform Act.

(3) The court did not find that the trial judge erred in admitting into evidence surreptitious recordings made by the father of two conversations with the mother, as was submitted by the mother. The court found he correctly determined admissibility by balancing the prejudicial effect against the probative value of the recordings, including their reliability.

Further, in light of deference owed to the factual findings of trial judges in family law matters, the court did not find any reversible error in the trial judge's analysis of the best interests of the child. The trial judge made no palpable and overriding error in making the factual finding that the children were suffering emotional abuse caused by their mother, and in deciding to reverse custody. The trial judge expressly considered and weighed the principle that a child should have as much contact with each parent as is consistent with the best interests of the child.

(4) The trial judge erred in failing to set a fixed timeframe in which the issue of access would be further reviewed. While the trial judge considered the future increase in access for the mother to be in the best interests of the children, he should have also imposed a timeline for a further review.

Note: The court also noted that the best interests of the children require a review of the access arrangements in the immediate future and directed that one be held no later than February, 2016, in order to move access forward and maximize contact with both parents. Pending the review hearing and considering the fresh evidence on appeal, the court ordered that the mother have unsupervised access one weekend each month and overnight access during the week once every two weeks.

Civil Endorsements

Pirpamer v. Zanette, 2015 ONCA 723

[Blair, Hourigan, Brown JJ.A.]


Patrick Di Monte, for the appellants

Wendy Greenspoon, for the respondent

Keywords: Zoning Law, Affidavit Evidence, Land Planning, Mutual Mistake

Criminal Law Decisions

R v. Du, 2015 ONCA 715

[Feldman, Benotto and Roberts JJ.A.]


R. Schumann, for the appellant
C. Afonso, for the respondent

Keywords: Criminal Law, Customs Act, Summary Conviction, Endorsement, Sentencing, Error of Law, Mens Rea

R. v. Arnaout, 2015 ONCA 714

[LaForme, Watt and Epstein JJ.A.]


D. Harris, for the appellant
J. Neander, for the respondent

Keywords: Criminal Law, Conviction, Post-hearing Submission

R. v. Kanthasamy, 2015 ONCA 719

[Watt, Hourigan and Huscroft JJ.A.]


C. Martell, for the appellant Kanthasamy
C. Assie, for the appellant S. Pathmanathan
A. Wheeler, for the respondent

Keywords: Criminal Law, Endorsement, Robbery, Preliminary Inquiry, Discharge Order, Evidence, Perrier Analysis

R. v. Sinclair, 2015 ONCA 721

[Feldman, Benotto and Roberts JJ.A.]


K. Baily, for the appellant
J. Mannen, for the respondent

Keywords: Criminal Law, Endorsement, Sentencing, Global Sentence, Totality Principle, Aggravating and Mitigating Factors

R. v. Stein, 2015 ONCA 720

[Watt, Hourigan and Huscroft JJ.A.]


R. Stern, for the appellant
V. Goela, for the respondent

Keywords: Criminal Law, Sentencing, Appropriate Range of Sentence

Ontario (Provincial Police) v. Mosher, 2015 ONCA 722


M. Moon, N. Rozier and K. Perchenok, for the appelants

H. Walbourne, for the respondent Thunder Bay Police Service

C. Diana, for the respondent Commissioner of the Ontario Provincial Police

N. Devlin and S. Montefiore, for the respondent Public Prosecution Service of Canada

Keywords: Criminal law, Certiorari, Disclosure, Third Party Records, R. v. O'Connor, Subpoena Duces Tecum, Audi Alteram Partem, Mootness

R. v. Howell, 2015 ONCA 728

[Feldman, Benotto and Roberts JJ.A.]

E. Chozik, for the appellant
L. Joyal, for the respondent

Keywords: Criminal Law, Endorsement, Miscarriage of Justice, Ineffective Assistance of Counsel

R. v. Kee, 2015 ONCA 730

[Strathy C.J.O, Benotto J.A. and Speyer J. (ad hoc)]


S. Bergman and B. Elzingacheng, for the appellant

A. Rose, for the respondent

Keywords: Criminal Law, Highway Traffic Act, S. 172(1), Fresh Evidence

R. v. M.A.J, 2015 ONCA 725

[Laskin, Hourigan and Pardu JJ.A]


M. Henein and M. Gourlay, for the appellant

T. Kozlowski, for the respondent

Keywords: Criminal law, Sexual Assault, Sexual Interference of a Minor, Fresh Evidence, Expert Evidence, Admissibility, Miscarriage of Justice, Improper Cross-Examination, Prior Statements, Limiting Instructions to Jury, Sentencing

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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